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Qwest Long Distance
Section 272 Affiliate Transactions

Billing and Collection Services for Interexchange Carriers

The Parties acknowledge that this Agreement contains commercially confidential information that may be considered proprietary by either or both Parties, and agree to limit the distribution of the Agreement to those individuals in their respective organizations with a need to know the contents of the Agreement.

TABLE OF CONTENTS

SECTION

I. PURPOSE OF THIS AGREEMENT

II. SCOPE OF THIS AGREEMENT

III. RESPONSIBILITIES OF USWLD

IV. PROVISION OF BILLING AND COLLECTION SERVICES

V. DEVELOPMENTAL CHARGE(S)

VI. SERVICE COMMITMENT

VII. PRICES; PAYMENT

VIII. DISPUTE RESOLUTION

IX. AUDIT

X. LIMITATION OF LIABILITY AND WARRANTY

XI. PERFORMANCE EVALUATION

XII. DATA RETENTION

XIII. INDEMNIFICATION

XIV. TAXES

XV. PURCHASE OF ACCOUNTS RECEIVABLE

XVI. LIMITATIONS PERIOD

XVII. TERM AND TERMINATION OF AGREEMENT

XVIII. PROPRIETARY AND CONFIDENTIAL INFORMATION

XIX. FORCE MAJEURE

XX. DEFAULT

XXI. AMENDMENTS; WAIVERS

XXII. ASSIGNMENT

XXIII. NOTICE AND DEMANDS

XXIV. THIRD PARTY BENEFICIARIES

XXV. GOVERNING LAW

XXVI. LAWFULNESS OF AGREEMENT

XXVII. CONFIDENTIAL STATUS

XXVIII. ENTIRE AGREEMENT

XXIX.HEADINGS

EXHIBIT A DEFINITIONS

EXHIBIT B DESCRIPTION OF SERVICES

EXHIBIT C PRICE LISTS

EXHIBIT D ACCOUNTS RECEIVABLE SETTLEMENT TERMS

EXHIBIT E TREATMENT AND COLLECTION POLICY

EXHIBIT F PERFORMANCE BASED PRICING PLAN

AGREEMENT FOR THE PROVISION OF BILLING AND COLLECTION SERVICES FOR INTEREXCHANGE CARRIERS

This Agreement for the Provision of Billing and Collection Services for Interexchange Carriers (hereinafter "Agreement") is entered into this 1st day of April, 1997, between U S WEST Communications, Inc., a Colorado Corporation and Malheur Home Telephone Company, an Oregon corporation (hereinafter referred to as "USWC") and U S WEST Long Distance, Inc., a Colorado corporation (hereinafter referred to as "USWLD"), acting through their authorized representatives.

WHEREAS, USWLD intends to purchase from USWC and USWC intends to provide to USWLD Billing and Collection Services (hereinafter referred to as "Services") to certain End User accounts, as described in Exhibit B; and

WHEREAS, effective January 1, 1987, USWC interstate Services provided to USWLD are provided on an untariffed, contractual, basis.

NOW, THEREFORE, in consideration of the mutual benefits accruing to each party, the parties hereby covenant and agree as follows:

Purpose of this Agreement
1. The purpose of this Agreement is to set forth terms and conditions pursuant to which USWC will provide Services to USWLD; provided however, that said Services shall be limited to USWLD's regulated basic toll or message telephone service ("MTS") or MTS related services. For purposes of this Agreement, regulated MTS shall mean telephone calls where the primary purpose of the charge is for the transportation of the message over USWLD's facilities and not for the content of the message.
2. This Agreement shall not include Services for any unregulated telecommunications or non-MTS messages, including but not limited to, telegrams, cablegrams, voice messaging, indecent communications for commercial purposes, or pay-per-call services. For purposes of this Agreement, a pay-per-call service shall mean any service:
  1. in which any person provides or purports to provide
    1. audio information or audio entertainment produced or packaged by such person;
    2. access to simultaneous voice conversation services; or
    3. any service, including the provision of a product, the charges for which are assessed on the basis of the completion of the call;
  2. for which the caller pays a per-call or per-time-interval charge that is greater than, or in addition to the charge for transmission of the call; or
  3. which is accessed through the use of a 900 telephone number or other prefix or area code designated by the Commission; or
  4. which is accessed through the use of a 500 telephone number for international calls.
3. USWC may provide Services for unregulated, non-MTS messages under separate terms and conditions mutually agreed upon by the Parties and included in an individual Exhibit to this Agreement.
4. In the event USWLD decides to act as a "clearing agent", as that term is commonly understood in the industry, USWLD understands and agrees that this Agreement shall be immediately canceled. Further, USWLD understands and agrees that a separate agreement specific for clearing agents will need to be negotiated between the parties for such services.

Scope of this Agreement

This Agreement defines the terms and conditions for which USWC will provide Services to USWLD. It includes the following Exhibits:

Exhibit A		Definitions
Exhibit B		Description of Services
Exhibit C		Price Lists
Exhibit D		Accounts Receivable Settlement Terms
Exhibit E		Treatment and Collection Policy
Exhibit F		Performance Based Pricing Plan

The above mentioned Exhibits are attached hereto and incorporated herein by reference.

Responsibilities of USWLD
1. Prior to the commencement of Services, USWLD shall provide USWC with a valid carrier identification code ("CIC") or pseudo CIC, issued by Bell Communications Research, Inc. ("Bellcore") or other authorized issuing entity, or an Alternate Billing Entity Code ("ABEC") for billing identification purposes. If such Bellcore assigned CIC is not available prior to commencement of Services, USWC will utilize a pseudo CIC.
2. USWLD grants USWC the right to use USWLD's name and logo on each page of the End User's bill which contains USWLD's charges. Further, USWLD grants USWC the right to include an informative message to the End User defining the relationship between USWC and USWLD.
3. USWLD assures USWC that USWLD will use commercially reasonable efforts at all times to give prompt, courteous, and efficient service to End Users, shall be governed in all dealings with End Users by the highest standards of honesty, integrity, and fair dealing, and will do nothing tending to discredit, dishonor, reflect adversely upon, or in any manner injure the reputation of USWC or the Services covered by this Agreement and the quality image associated with USWC or such Services.
4. In the course of providing operator assisted calls USWLD will comply with Paragraph C above and, in addition, USWLD will:
  1. prior to the commencement of charging, identify the provider of service (using the provider name that will appear on the End User's bill), for each call USWLD responds to, thereby giving the End User a reasonable opportunity to terminate the call without incurring a charge;
  2. upon an End User's request, quote accurate rates and charges prior to placing the End User's call, thereby giving the End User a reasonable opportunity to terminate the call without incurring a charge;
  3. provide expeditious handling and connection to the appropriate agency for emergency calls. USWLD may handle emergency services directly or may contract with other providers of emergency services.
5. USWLD ensures USWC that it will provide the actual origination and destination information including telephone numbers, bill phrases and other pertinent data for each End User message. Further, USWLD agrees to send USWC billing details that accurately identify the calls that were originated e.g. calling card, collect, etc.
6. USWLD shall not submit to USWC any messages ninety (90) days or more after the date of message (hereinafter "old messages"). USWC will reject such messages to USWLD as unbillable.
7. USWLD's failure, at any time, to comply with the requirements of this Section or any other Sections of this Agreement will constitute a breach and will entitle USWC to cancel this Agreement pursuant to Section XX, and to invoke any other remedies available in law or equity.
Provision of Billing and Collection Services
1. USWC interstate Services shall be provided in accordance with the terms and conditions of this Agreement.
2. USWC intrastate Services shall be provided in accordance with the Intrastate Access Service Tariffs (hereinafter "Intrastate Tariff") and the terms and conditions of this Agreement which shall supplement the Intrastate Tariff to the extent not in conflict or inconsistent therewith. To the extent of any conflict or inconsistency between this Agreement and an Intrastate Tariff, the provisions of the Intrastate Tariff shall control for so long as the intrastate services remain tariffed and, thereafter, shall be provided in accordance with this Agreement.
3. To the extent USWC and USWLD will enter into a joint marketing arrangement, USWC may offer Billing and Collection Services as part of said arrangement in accordance with the provisions of Section 272 of the Telecommunications Act of 1996. In the event an FCC ruling determines that USWC cannot offer Services as part of joint marketing arrangements, some or all of the following Services will be terminated:
  
  Bill Rendering Discounts (Section VII.C)
  Custom Request Service (Exhibit B.1)
4. Presentation of the bill in USWC's envelope shall be at the sole discretion of USWC unless USWLD has specified otherwise under the Custom Request Service.
5. When technically feasible, USWC will return messages to USWLD as "Unbillable" for those End User accounts that are in "Business Office Write-Off Status" as those terms are defined in Exhibit A. Further, USWC will return messages to USWLD as Unbillable for those End User accounts that are in account or entity denial status as described in Section 3 of Exhibit E.
6. Monthly charges shall be on the basis of usage, if applicable, multiplied by the price elements as set forth in Exhibit C.
7. In the event of a Federal Communications Commission ("FCC") order or any state regulatory order which may cause USWC an increase or decrease in the cost for providing intrastate and interstate Services, USWC reserves the right to modify its rates for intrastate and interstate Services retroactive to the effective date of such order. In such event, USWLD reserves the right to terminate this Agreement upon thirty (30) days written notice to USWC.
8. USWC will provide notification to USWLD of adjustments issued by USWC via standard EMI Record or other appropriate reporting means.
9. USWC will provide notification to USWLD of uncollectibles via standard EMI record or other appropriate reporting means.
Developmental Charge(s)
1. USWC consists of three distinct operating regions Central, Eastern and Western (hereinafter each operating region shall be individually referred to as "USWC Region").
2. After the initial CIC, ABEC or Pseudo CIC has been implemented in each USWC Region, USWLD understands and agrees that USWC requires a custom developmental charge, ("Developmental Charge"), for each additional identifier, i.e., a CIC, ABEC or Pseudo CIC that is subsequently implemented in each USWC Region. Such Developmental Charge shall be due and payable prior to the Start Date for each USWC Region at the then current rate.
3. For purposes of this Agreement the Start Date shall mean the date when USWC receives USWLD's first live billing data to be billed to the End Users. In the event USWC receives live billing data after the first day of the month, the Start Date shall begin the first day of the following month.
Service Commitment
1. USWLD understands and agrees that USWC requires an annual minimum (hereinafter "Service Commitment") in the amount of Fifty Thousand Dollars ($50,000) in recurring Service charges per USWC Region, that is implemented. Such Service Commitment is required for USWLD's actual charges incurred for Services rendered to USWLD. The Service Commitment will be due and payable as follows:
  1. If the actual charges incurred by USWLD for each USWC Region do not meet or exceed the Service Commitment in a given year, then USWC will conduct a true-up for that year after the December B&C invoices are billed in January. If USWLD has not been receiving billing and collection services from USWC under a B&C agreement for a period of one year, then a proration will be applied to the actual number of months for which USWLD has received service from USWC.
  2. Each year during the term of this Agreement, USWC will invoice USWLD in February for the difference between the total Service Commitment due and the actual recurring charges incurred by USWLD across all USWC Regions. In the event an Intrastate Tariff in an individual state requires a service commitment, then such service commitment shall apply towards the Service Commitment described herein. Further, any amounts that exceed the Service Commitment in one or more USWC Regions may be applied towards the other USWC Region(s) and any amounts owing in one USWC Region may be satisfied by any excess in any other USWC Region(s).
  3. USWLD understands and agrees that Initial Developmental Charges of $135,000, paid to implement basic processing capabilities, will not apply towards the Service Commitment. Other Custom Development Charges will apply toward the Service Commitment. USWLD agrees to pay USWC any amounts due in accordance with the provisions of Section VII below.
  4. Upon termination of this Agreement, the Service Commitment will be prorated using the number of days beginning with the previous settlement period to the date of termination. USWC will invoice USWLD for the difference between the total Service Commitment due and the actual recurring charges incurred by USWLD across all USWC Regions. Such amount will be invoiced to USWLD and is due and payable in accordance with the provisions of Section VII below.
  5. If termination of this Agreement occurs twelve months after the effective date of this Agreement, or sooner, USWC will conduct a true-up as follows: 1) USWC will prorate the Service Commitment for the period from the implementation date of the contract to the date of termination; and 2) will calculate the difference between the total Service Commitment due and the actual recurring and non-recurring charges incurred by USWLD across all USWC Regions. Such amount will be invoiced to USWLD and is due and payable in accordance with the provisions of Section VII below.
Prices; Payment; Discount Plans
1. Prices
  
  Except as specified in Section IV of this Agreement, and except for Services provided pursuant to an Intrastate Tariff (to the extent the tariff rates differ from the prices specified in Exhibit C), all Services provided pursuant to this Agreement shall be provided at the prices specified in Exhibit C.
2. Payment
  1. USWLD's payment for Services shall be due on the payment due date reflected on the USWC Billing and Collection invoice ("B&C Invoice").
    
    If a payment would be due on a Saturday, Sunday or bank holiday, payment for the amount due USWC will be as follows:
    1. If such payment date falls on a Sunday or on a holiday which is observed on a Monday, the payment date shall be the first non-holiday day following such Sunday or holiday.
    2. If such payment date falls on a Saturday or on a holiday which is observed on Tuesday, Wednesday, Thursday, or Friday, the payment date shall be the last non-holiday day preceding such Saturday or holiday.
  2. Any payment received by USWC for Services rendered after the payment date or any payment received in funds which are not immediately available to USWC on the payment date will be subject to a late payment penalty. If late payment charges are not permitted by local jurisdiction for this Service, this provision shall not apply. If applicable, the late payment penalty shall be the portion of the amount due USWC received after the payment date times a late factor of 0.000310 per day compounded daily for the number of calendar days from the payment date to and including the date that USWLD actually made the payment to USWC, which would result in an annual percentage rate of 12%.
  3. Any late payment resulting from bank error will not be subject to the late payment penalty provided that USWLD can verify that it was not at fault. It is the responsibility of USWLD to notify the banks involved for resolution of the bank error.
  4. USWC reserves the right, at its sole discretion, to deduct (net) any amounts past due and owing USWC for any Services provided to USWLD, from any funds or proceeds due USWLD from USWC, arising from the purchase of accounts receivable settlements. USWC is not required to deduct (net) amounts past due to prevent USWLD from being in default of this Agreement.
  5. Any dispute associated with USWLD's payment shall be governed by the provisions of Section VIII of this Agreement. Should the dispute not be resolved by the Payment Date of the amount due, USWLD shall, notwithstanding the continuing existence of the dispute, pay the billed amount in accordance with the terms defined in this Agreement.
3. Discount Plans
  1. USWLD understands that it may be eligible for a discounted Bill Rendering Rate, as Described in Exhibit F, Performance Based Pricing Plan.
  2. When USWLD exceeds $450,000,000 in End User Billed Revenue in a calendar year as a direct result of submitting 1+ traffic to USWC under USWLD's primary CIC for January 1998 through December 1999, USWC and USWLD will negotiate in good faith for other discounted Bill Rendering Rates based on additional volumes under the provisions of Section IV.C.
    1. Such discounted rate, to be negotiated at a later date per Section XXI, will be based on a Modified Performance Based Pricing Plan or a Volume Discount Plan.
    2. Any discounted rates apply only to USWLD messages in a USWC shared End User bill.
  3. The offering of discounted Bill Rendering rates are subject to Section IV.C.
Dispute Resolution

In the event of any dispute between USWC and USWLD with respect to the terms and conditions of this Agreement, or any subject matter referred to in or governed by this Agreement, except disputes in which a party seeks equitable relief, then such disputes shall be settled as follows:
1. Escalation Procedures
  
  All disputes between the parties with respect to any subject listed in the preceding paragraph shall be escalated through normal business procedures to the officer level prior to the commencement of any arbitration proceeding.
2. Arbitration
  1. As between the parties hereto, all questions as to rights and obligations arising under the terms of this Agreement and the Intrastate Tariffs are subject to binding arbitration.
  2. Either party may make a demand for binding arbitration by filing with the other a demand in writing signed by an officer of the complaining party.
  3. The parties may agree upon one arbitrator, but in the event that they cannot agree, there shall be three, one named in writing by each of the parties within ten (10) business days after demand for arbitration is given and a third chosen by the two appointed. Should either party refuse or neglect to join in the appointment of the arbitrator(s) or to furnish the arbitrator(s) with any papers or information demanded, the arbitrator(s) are empowered by both parties to proceed ex parte.
  4. Arbitration shall take place in the principal headquarters city of the party against whom the demand for arbitration has been filed and a single hearing before the arbitrator(s) of the matter to be arbitrated shall take place at the time and place within said city as is selected by the arbitrator(s).
    
    The arbitrator(s) shall select such time and place promptly after his/her (or their) appointment, provided that the time scheduled for the hearing shall not be later than thirty (30) business days after the date of appointment of the arbitrator(s). The arbitrator(s) shall give written notice thereof to each party at least ten (10) business days prior to the date so fixed. In the event a panel of three arbitrators is necessitated by the parties' inability to agree upon a single arbitrator, such notice of the time and place of the hearing shall also identify the third member of the panel. At the hearing, any relevant evidence may be presented by either party, and the formal rules of evidence applicable to judicial proceedings shall not govern. Evidence may be admitted or excluded in the discretion of the arbitrator(s). Said arbitrator(s) shall hear and determine the matter and shall execute and acknowledge a binding decision in writing and cause a copy thereof to be delivered to each of the parties within ten (10) business days of the hearing date.
  5. The determination of the panel shall be by majority vote, with each arbitrator having a single vote. The award rendered by the arbitrator (or the majority if more than one) shall be final, and judgment may be entered upon it in accordance with applicable law in any court having jurisdiction.
  6. Prior to the scheduled hearing date, the parties shall agree on procedures to be used in connection with the arbitration, except as they may conflict with the specific provisions contained in this Section VIII. To the extent the parties cannot agree upon procedures, the arbitration shall be conducted in accordance with the Commercial Rules of The American Arbitration Association (AAA) but not necessarily under the auspices of the AAA.
  7. The costs of such arbitration shall be borne equally by the parties; provided, however that each party shall bear its own expense in prosecuting or defending a claim; and provided further that the arbitrator(s) shall assess the costs and expenses of an arbitration proceeding against a party if the arbitrator(s) determines that the prosecution or defense of a claim was frivolous in nature.
Audit
1. For purposes of this Section, an audit or review shall mean a comprehensive audit/review encompassing multiple services and multiple departments (hereinafter "Audit"). An Audit of USWC by USWLD may consist of an Audit of USWC's operations on information described in paragraph C. below; an Audit of USWLD by USWC may consist of an Audit of USWLD's operations on information described in paragraph D. below. Each party may conduct not more than two (2) Audits in any twelve (12) month period during the term of this Agreement over all three USWC Regions. If an Audit is requested in only one or two USWC Regions, it shall be counted as one Audit. For purposes of this Section, an examination shall mean an inquiry on a single issue or a specific topic ("Examination(s)"). Examinations shall be limited to a total of three Examinations in any twelve (12) month period during the term of this Agreement regardless if the request is in one or more USWC Regions. Examinations may be conducted as needed, subject to the agreement of the party being examined, which shall not be unreasonably denied. Both parties agree that the Audit or Examination shall be limited to the subject matter outlined in the written notification as described in paragraph B. below. Any claim resulting from an Audit or Examination must be supported by a statistically valid sample.
2. In requesting an Audit or Examination, the requesting party shall give no less than forty-five (45) days written notice of intent to Audit or to commence an Examination. Such notice shall identify whether the requesting party will perform an Audit or Examination, the date upon which the Audit or Examination is to commence, the location, the requesting party's representatives, the subject matter of the Audit or Examination, specific materials to be reviewed including the number and type of accounts and message details, and the time period covering the materials or records subject to the Audit or Examination. The parties shall mutually agree on the commencement date and subject matter of such Audit or Examination; such agreement shall be reduced to writing.
3. Upon written notice by USWLD to USWC, USWLD shall have the right, through its authorized representative, to conduct an Audit or Examination pursuant to Paragraph B. above, all such records and accounts as may under recognized accounting practices contain information bearing upon (i) amounts being billed to USWLD's End Users by USWC as part of its provision of Services to USWLD, and (ii) the charges to USWLD for such Services. The information subject to the Audit or Examination will be limited to the period of time for which the Service(s) were provided. All information received or reviewed by USWLD or its authorized representative is considered confidential and is not to be distributed, provided or disclosed in any form to anyone not involved in the Audit or Examination, nor is such information to be used for any other purpose. USWC shall not be required to produce directly to USWLD's auditors source documents which contain information relating to other entities for whom USWC is providing Services. Where source documents contain information relating to one or more entities commingled with information relating to USWLD, USWC shall provide and USWLD shall accept extracts of such documents or masked documents which contain only information pertinent to USWLD.
4. Upon reasonable written notification by USWC to USWLD, USWC or its authorized representatives shall have the right to commence an Audit or Examination pursuant to Paragraph B. above, of such source documents, systems, records and procedures as may, under recognized accounting practices, contain information bearing upon the content of billing records sent by USWLD to USWC for billing, including but not limited to, the types and ages of billing records. Such billing records shall be limited to the messages submitted to USWC, by USWLD, for billing purposes.
5. All costs incurred by USWC, on behalf of USWLD, during the course of an Audit or Examination as ordered by a third party will be the responsibility of USWLD. A detailed estimate will be prepared based upon USWLD's written notice and/or specifications supplied by USWLD in accordance with the terms described in Exhibit B, Consulting Service. The estimate provided to USWLD via certified mail will be valid for a period of thirty (30) days from the date the estimate was received by USWLD. The estimate and any subsequent revisions must be approved in writing by USWLD prior to USWC performing such services or USWLD incurring any costs.
6. Adjustment to the charges payable to either party under this Agreement or the Intrastate Tariffs shall be made to correct errors or omissions disclosed by the Audit or Examination if mutually agreed to by the parties or directed through arbitration. Corrective action shall be initiated within thirty (30) days of the mutually agreed upon resolution of a claim or of an arbitrator's award.
Limitation of Liability; Warranty
1. USWLD and USWC agree to use best efforts to provide each other verbal notification immediately upon discovery of billing errors followed by written notification within thirty (30) days. Such written notification shall contain detailed information to aid in identifying the cause of the billing error and its correction. USWC agrees to extend its best efforts to correct billing errors within thirty (30) days of notification (by USWLD) or discovery (by USWC). Where meeting the thirty (30) day objective is not possible, USWC will notify USWLD of the expected resolution date. The above described warranty is the only warranty provided in connection with this Agreement. THIS WARRANTY IS EXCLUSIVE AND IS IN LIEU OF ALL OTHER EXPRESS AND IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR QUALITY.
2. USWLD will pay USWC for the correction of billing errors caused by any inaccurate or incomplete USWLD instructions whether written or verbal. Such billing errors include, but are not limited to, errors as a result of requirements defined in specifications furnished or approved by USWLD. Further, USWLD will pay for the correction of billing errors resulting from billing details passed to USWC that are not accurately identified or any other billing error resulting from USWLD's failure to perform in accordance with Section III.
3. Absent knowing and willful misconduct, USWC's total liability and USWLD's sole and exclusive remedy for any loss, cost, claim, injury, liability, or expense, including reasonable attorneys' fees, regardless of theory, shall be limited to the actual damages as follows:
  1. If USWC, due to its error or omission, loses, damages or destroys USWLD's recorded messages while providing Services and USWC cannot bill or re-bill the messages, USWC, in conjunction with USWLD, will estimate the volume of the messages and associated revenue based on the most comparable previously known values less uncollectibles and adjustments. Where the most comparable values are unknown the estimated revenue associated with such unbilled messages will be mutually agreed upon.
  2. If USWC, due to its error or omission, fails to process the USWLD's messages or processes the messages incorrectly, the parties agree that USWC will promptly, upon correction of the billing system error, reprocess the messages. If, however, upon mutual agreement between the parties, some or all of such reprocessing will not be done within ninety (90) days from the initial receipt of the messages and is determined unfeasible from an economic, technical or marketing perspective, such party can request that some or all of the reprocessing not be done.
  3. With respect to payment of any amounts due USWLD under Paragraphs 1 and 2 above, USWC shall be entitled to recover charges for Services commensurate with such payment. USWLD is responsible for charges associated with Services provided as a result of the reprocessing and will not incur additional charges for Services associated with reprocessing the messages.
4. When USWC discovers or is notified in a timely manner that, due to its error or omission, incomplete billing information detail has been provided to USWLD, USWC will make every reasonable effort to recover and provide the detail to USWLD at no additional charge.
5. In the event the parties cannot agree that reprocessing is feasible or cannot agree on a revenue settlement, the parties agree to utilize Exhibit D, Sections 9, 10, 11 and 12, to resolve the dispute.
6. USWC assumes no liability for accuracy of messages recorded by USWLD and provided by USWLD to USWC for billing.
7. USWLD's liability to USWC (as distinct from USWLD's obligation to pay for Services provided pursuant to this Agreement) for any loss, cost, claim, injury, liability, or expense, including reasonable attorneys' fees, regardless of theory, shall be limited to the amount of actual damages incurred.
8. The parties may be liable to the other for any indirect or special damage arising out of or in connection with knowing or willful misconduct. In no event shall either party be liable to the other for consequential damages.
Performance Evaluation
1. USWC has a corporate team objective which is dependent, in part, on meeting the performance and development goals of USWLD.
2. USWLD may evaluate USWC's performance by written evaluation on a monthly basis. USWC will also conduct a performance evaluation meeting with USWLD on a quarterly basis. Any feedback received from USWLD may impact division performance evaluations and will be used by USWC to improve existing processes or performance.
Data Retention

USWLD agrees to retain copies of all files transmitted or in any other fashion forwarded to USWC for a minimum of ninety (90) calendar days after date of original transmission to USWC. USWLD further agrees to retransmit or re-forward files upon request of USWC at no cost to USWC. USWLD will make best efforts to retransmit or resend such files no later than three (3) calendar days from receipt of a request from USWC. However, in the event that the original transmission cannot be received by USWC due to transmission system failure, improperly formatted data on the file, or other reason, USWLD will immediately retransmit the file upon correction of the problem causing the failure.
Indemnification
1. Each party (the "Indemnifying Party") will indemnify and hold harmless the other party ("Indemnified Party") from and against any loss, cost, claim, liability, damage expense (including reasonable attorney's fees) to third parties, relating to or arising out of negligence or misconduct by the Indemnifying Party, its employees, agents, or contractors in the performance of this Agreement. In addition, the Indemnifying Party will, to the extent of its negligence or misconduct, defend any action or suit brought by a third party against the Indemnified Party for any loss, cost, claim, liability, damage or expense relating to or arising out of negligence or misconduct by the Indemnifying party, its employees, agents, or contractors, in the performance of this Agreement.
2. The Indemnified Party will notify the Indemnifying Party promptly in writing of any written claims, lawsuits, or demand by third parties for which the Indemnified Party alleges that the Indemnifying Party is responsible under this section and tender the defense of such claim, lawsuit or demand to the Indemnifying Party. The Indemnified Party also will cooperate in every reasonable manner with the defense or settlement of such claim, demand, or lawsuit.
3. The Indemnifying Party will not be liable under this section for settlements by the Indemnified Party of any claim, demand, or lawsuit unless the Indemnifying Party has approved the settlement in advance or unless the defense of the claim, demand, or lawsuit has been tendered to the Indemnifying Party in writing and the Indemnifying Party has failed promptly to undertake the defense.
4. Under the terms of this Agreement, USWC will provide to USWLD certain information regarding USWLD's subscribers, which may include, but is not limited to, credit information. USWC is releasing to USWLD only credit information based on USWC's first-hand knowledge of its own experiences with the subscriber involved. USWLD agrees to indemnify USWC for any claim, regardless of theory, which arises against USWC based on the release of any subscriber information from USWC to USWLD.
Taxes
1. General Provisions :
  
  USWLD shall be liable for all Federal, state, or local sales, use, excise, gross receipts, or other taxes or tax-like fees, imposed on or with respect to USWLD's services (hereinafter referred to as "Tax(es)", including Taxes imposed directly on USWC and relating to USWLD's services. USWLD shall, where permissible by law, file returns or reports relating to such Taxes, and pay or remit all such Taxes and other items to the appropriate taxing authority.
  1. USWC shall use the same tax practice and procedures (including exemption procedures) to apply, bill, and collect taxes on new and existing services that are the subject of this Agreement that it uses or would use to apply Taxes on similar or comparable USWC services, unless notified in writing to do otherwise. However, USWC shall not bill Taxes, the effect of which are passed on to End User customers pursuant to tariff or accepted state regulatory practice, unless USWLD has filed with the appropriate regulatory commission or other agency tariffs or notice that will authorize such pass-on. In such event, USWLD will provide USWC with sufficient notice and documentation to implement such pass-on. USWLD has the right to review USWC's tax procedures and supporting documentation. USWC will implement any tax law changes into its procedures as required by applicable tax law, however, in no instance shall USWC be given less than sixty (60) days to implement such changes.
  2. USWLD understands and agrees that USWC is merely providing Services with respect to the billing and collection of Taxes hereunder. USWC shall not be responsible for billing any foreign state taxes associated with a jurisdiction outside of USWC's operating Region to USWLD's Services unless billing information, with respect to such Taxes, is provided to USWC by USWLD.
  3. When notified by USWLD to change its tax procedures with respect to applying and billing Taxes on USWLD's services, USWC shall, within the constraints imposed by its billing system, implement such tax procedures as USWLD advises and charging USWLD for the costs of such change; provided that USWC shall pay for any change required in order to ensure that its billing system properly accounts for all taxes if such change also applies to all USWC End Users. To the extent USWC's billing system cannot accommodate such requested change without significant modifications, USWC shall continue to use the same tax procedures it uses for similar or comparable USWC services, again excepting tariffed or regulatory approved tax items as described in Paragraph A.2 above, and will be held harmless by USWLD for using such procedures except in the case of gross or willful negligence. In no event shall USWC be liable for anything other than penalties that may apply, and USWLD shall be liable for Taxes and interest owed.
  4. USWC shall not be entitled to retain or receive from USWLD any statutory fee or share of Taxes to which the person collecting such Taxes is or may be entitled under applicable law.
  5. USWC shall use the same tax exemption status with respect to USWLD End Users as it uses for its own customers, and to the extent necessary, furnish to USWLD copies of such information as may be in its possession regarding tax exemptions of End Users and services related to USWLD, but without warranty as to accuracy or completeness.
  6. USWC shall furnish to USWLD on a monthly basis all information and reports reasonably necessary for USWLD to file its tax returns, according to delivery schedules provided to USWC by USWLD, from time to time, that are mutually agreed upon by the Parties. Such information and reports shall be in the format normally used by USWC in the preparation of its own tax returns unless mutually agreed otherwise. USWLD shall file all returns for all such Taxes with the applicable taxing authority and pay or remit all such Taxes to the applicable taxing authority. USWC shall have no responsibility for the filing of returns of payments of Taxes.
2. Taxes - Indemnity and Recourse :
  1. USWLD shall be responsible for payment of all Taxes imposed on Services performed by USWC under this Agreement, the cost of which were not part of the price agreed upon for such Services under this Agreement. Should any Federal, State or local jurisdiction determine that any such additional Taxes are due by USWC as a result of USWC's performance of any obligation under this Agreement, USWC will so advise USWLD, allow USWLD to participate in the audit process regarding such issue, and secure USWLD's concurrence prior to making any remittance of said Tax to the jurisdiction. USWLD agrees to be liable for any such Tax, interest, penalties and surcharge, but retains the right to protest the assessment. If USWLD disagrees with any assessment of Taxes due by USWC or disagrees with an assessment of any additional Tax penalty, surcharge and interest due by USWC as a result of USWC's performance of any obligation under this Agreement, USWLD shall, at its option and expense (including payment of any such assessment prior to final resolution of the issue), have the right to seek a ruling as to the applicability of any such Tax or to protest any assessment and participate in any legal challenge to such assessment, but shall be liable for any Tax, penalty, surcharge and interest ultimately determined to be due. USWC shall, when requested by USWLD and at USWLD's expense, cooperate or participate with USWLD in any such proceeding, protest or legal challenge.
  2. USWLD will indemnify, hold harmless, and defend (at USWLD's expense) USWC from and against any liability resulting from any Taxes, penalties and interest, loss, cost, claim, liability, damage, cause of action, or expense (including reasonable attorney's fees) relating to or arising out of USWLD's failure (to the extent not attributable to a negligent act or omission of USWC) to pay any Tax or file any return as required by law or to comply with any applicable tax laws or regulations, or relating to USWC's obligations concerning Taxes, including Taxes imposed directly on USWC and relating to USWLD's services, in accordance with this Agreement. If USWLD disagrees with an assessment of any additional Taxes, penalty, addition to Tax, surcharge, or interest due by USWC as a result of USWC's performance of any obligation under this Agreement, or disagrees with a determination that an additional charge is applicable to USWC's billing to USWLD for Services under this Agreement, USWLD shall, at its option and expense (including, if required by law, payment of any such assessment prior to final resolution of the issue) have the right to seek administrative relief, a ruling, judicial review (original and appellate level), or other appropriate review (in a manner deemed appropriate by USWLD), as to the applicability of any such Taxes, penalties, interest or additional charges, or to protest any assessment and direct any legal challenge to such assessment, but shall be liable hereunder for any such amount ultimately determined to be due. Notwithstanding the above, such indemnity is conditioned upon USWC providing USWLD notification (such notification to be provided within five (5) business days of receipt by USWC's Tax Department of said assessment) of any proposed assessment of any additional Taxes, penalty or interest due with respect to this Agreement. USWC shall, when requested by USWLD and at USWLD's expense, cooperate or participate (but not control) with USWLD in any such proceeding, protest or legal challenge and if USWC's participation is not requested by USWLD, USWC may participate (but not control), at its own expense, in any such proceeding, protest or legal challenge.
  3. USWC agrees to indemnify, hold harmless, and defend at USWC's expense, USWLD from and against any liability or loss arising from additional Taxes and interest (including reasonable attorney's fees) incurred by USWLD as a result of:
    1. the willful failure of USWC to provide USWLD, pursuant to Section XIV hereof, accurate and complete information with which to file its Tax returns and remit payment; or
    2. the willful failure of USWC to accurately calculate and bill appropriate Taxes pursuant to Section XIV hereof.
  4. USWC agrees to indemnify, hold harmless, and defend at USWC's expense, USWLD from and against any liability or loss arising from additional penalties incurred by USWLD as a result of:
    1. negligent failure of USWC to provide USWLD, pursuant to Section XIV hereof, accurate and complete information with which to file its Tax returns and remit payment; or
    2. the negligent failure of USWC to accurately calculate and bill appropriate Taxes pursuant to Section XIV hereof.
3. Taxes - Gross Receipts Taxes:
  
  As a supplier of billing and collection services, USWC is billing USWLD's revenues for a specific fee. USWC shall not report these billings as its own receipts for gross receipts tax purposes or any other tax purpose.
Purchase of Accounts Receivable

USWC will purchase from USWLD its accounts receivable that arise from bills rendered by USWC to End Users. The purchase of accounts receivable will be limited to Amounts Due USWLD (as described in Exhibit D, Section 2) when USWC provides Services for USWLD. USWC's purchase of USWLD's accounts receivable shall be with full recourse as set forth in Exhibit D.
Limitations Period

No claim or demand under this Agreement, including demands made under the arbitration section hereof, or any other demand or claim with respect to this Agreement may be made or brought by either party more than two years after the date of the event that gave rise to the demand or claim except that: 1) the limitation period herein shall not apply to claims for revenue due USWLD from its End Users to the extent USWC has collected and retained such revenue; 2) a demand or claim for indemnification under this Agreement may be made or brought by a party for two years after the accrual of the cause of action for indemnity; and 3) any claim in the nature of fraud or concealment may be brought within two years of discovery of the existence of such fraud or concealment.
Term and Termination of Agreement
1. This Agreement will become effective on April 1, 1997 and shall continue through March 31, 2000, or until such time as this Agreement is superceded by a new agreement.
2. Either party may request that the terms and conditions of this Agreement be renegotiated or terminated for convenience and without penalty upon six (6) months written notice to the other party. USWLD's sole and exclusive obligation for termination under this Section is to make payment for all balances due and for authorized charges for any Custom Request development work completed.
Proprietary and Confidential Information
1. General Provisions:
  Designation of Proprietary Information.
  
  In connection with the Services to be provided by USWC to USWLD hereunder, USWC and USWLD may find it necessary or beneficial for a party to disclose to or receive from the other party, specifications, files, drawings, data, records, reports, computer programs or other technical and business information ("Proprietary Information") which the disclosing party considers proprietary and confidential.
  1. For the purpose of this Agreement the following shall be Proprietary Information of USWC:
    1. All traffic and usage data internally generated by USWC in the normal conduct of USWC's business of providing exchange access, information access or other telecommunications or information services.
    2. All End User Account Information.
    3. Except as otherwise specifically provided for in this Agreement, all tools and materials including, but not limited to, software, files, data bases, design documents and reports used by USWC to produce data pursuant to this Agreement.
    4. All information associated with USWC-owned public telephones.
2. Protection of Proprietary Information .
  
  With respect to Proprietary Information provided to the receiving party under this Agreement, the receiving party agrees to:
  1. hold the Proprietary Information in confidence and to protect it to the same degree it protects its own proprietary and confidential information;
  2. restrict disclosure of the Proprietary Information solely to those employees, contractors and agents of the receiving party (and its affiliates) with a need to know, and not disclose it to any third party;
  3. advise those employees, contractors and agents of their obligations with respect to the Proprietary Information; and
  4. use the Proprietary Information only for the purposes of this Agreement, except as may otherwise be mutually agreed upon in writing.
  Each party acknowledges that in the performance of Services hereunder, a party's Proprietary Information may be commingled with Proprietary Information of the other party or with the Proprietary Information of third parties. Accordingly, the parties shall, to the extent practicable, use good faith efforts to ensure that such Proprietary Information shall be masked or rendered mechanically inaccessible to other party. However, there may be instances in which efforts to mask or screen such Proprietary Information are impracticable, or in which disclosure is inadvertent. In such instances, the receiving party will neither use or disclose the Proprietary Information except as required to fulfill its obligations pursuant to this Agreement.
3. Information Not Subject to Section XVIII .
  
  The receiving party shall have no obligation to preserve the proprietary nature of any information which:
  1. was previously known to the receiving party free of any obligation to keep it confidential, or
  2. is disclosed to third parties by the disclosing party without restriction, or
  3. is or becomes publicly available by other than unauthorized disclosure, or
  4. is independently developed by the receiving party,
  Information shall not be deemed to be in the public domain or in the receiving party's possession or knowledge merely because such information is embraced by more general information in the public domain or in the receiving party's possession or knowledge.
4. Requests for Information .
  
  In the event either party is requested or required (by oral question, interrogatories, requests for information or documents, subpoena, civil investigative demand or similar legal process) to disclose Proprietary Information of the other to any lawfully constituted authority, it is agreed that the party requested or required to furnish the Proprietary Information will provide the other party with timely notice in order for that party to seek a protective order. To avoid the administrative burdens associated with such advance notice of protective arrangements, either party may respond to routine USWLD requests, legal process or lawful demand involving the disclosure of Proprietary Information. A party may disclose or provide Proprietary Information of the other party to implement, effect and enforce the party's tariffs or to meet the requirements of a court, regulatory body or government agency having jurisdiction over the party; provided that, the party making the disclosure shall notify the other party so as to give that party a reasonable opportunity to object to such disclosure. A party may not unreasonably withhold approval of protective arrangements provided by any such court, regulatory body or government agency. Nothing in this Section requires either party to support or not support the position of any person or entity on the issue of whether any particular Proprietary Information is proprietary under applicable law or this Agreement.
5. The provisions of this Section XVIII shall survive the termination of this Agreement, and, at the same time of termination, the receiving party shall, if practicable and upon request, return the Proprietary Information of the disclosing party which is in tangible form.
Force Majeure
1. Neither party shall be held liable for any delay or failure in performance of any part of this Agreement from any cause beyond its control and without its fault or negligence, such as acts of God, acts of civil or military authority, government regulations, embargoes, epidemics, war, terrorist acts, riots, insurrections, fires, explosions, earthquakes, nuclear accidents, floods, strikes, power blackouts, volcanic action, other major environmental disturbances, unusually severe weather conditions, inability to secure products or services of other persons or transportation facilities, or acts or omissions of transportation common carriers (collectively referred to as "Force Majeure Conditions").
2. If any such Force Majeure Condition occurs and results in a delay or failure in performance of any part of a party's obligations under this Agreement for more than sixty (60) calendar days, the other party may, by written notice given to the party whose performance was delayed or who failed to perform, immediately terminate that part of this Agreement that shall be affected by such delay or failure to perform, without penalty.
Default
1. In addition to all other rights and remedies provided herein or at law or equity, either party shall have the right to cancel this Agreement in whole or in part, without any further obligation to the other (excepting obligations incurred prior to the effective date of cancellation) if the other party is in breach or default of this Agreement and such breach continues for thirty (30) days after written notification.
2. In the event USWLD is in breach or default of this Agreement as a result of submitting unregulated telecommunications or non-MTS messages, as described in Section I, Paragraph B, USWC shall have the right to terminate this Agreement immediately.
3. Either party's failure to perform any of its obligations under this Agreement, including, but not limited to, any representation or warranty made by a party herein that is misleading or materially inaccurate, shall be deemed to be a default.
4. Except for the provisions of Paragraph B above, a party may cure a material breach by taking all of the following steps: (1) notifying the non-breaching party, in writing, that the breaching party wishes to cure the breach and continue the Agreement; (2) terminating any breaching acts, omissions, or behaviors; (3) correcting any existing breaches including but not limited to paying any charges due under this Agreement; and (4) providing security reasonably satisfactory to the non-breaching party, (which may or may not include the provisions set forth in Section VI) for example, a performance bond in an appropriate amount. Any material breach must be cured expeditiously and within the thirty (30) day notice period.
Amendments; Waivers

This Agreement or any part thereof or any Exhibits hereto or documents referred to herein may be modified or additional provisions may be added by written agreement signed by or on behalf of both parties. No amendment or waiver of any provision of this Agreement and no consent to any default under this Agreement shall be effective unless the same shall be in writing and signed by or on behalf of the party against whom such amendment, waiver or consent is claimed. In addition, no course of dealing or failure of any party to strictly enforce any term, right or condition of this Agreement shall be construed as a waiver of such term, right or condition.
Assignment

Any assignment by either party of any right, obligation or duty, in whole or in part, or of any other interest hereunder, without the written consent of the other party shall be void; provided however, that such consent is not required when the proposed assignment is to be made to any parent, subsidiary of parent, affiliate or successor of the assigning party. All obligations and duties of any party under this Agreement shall be binding on all successors in interest and assigns of such party.

Notice and Demands

Except as otherwise provided under this Agreement, all notices, demands, or requests which may be given by any party to the other party shall be in writing and shall be deemed to have been duly given on the date delivered in person or deposited, postage prepaid, in the United States mail and addressed as follows:

U S WEST Long Distance, Inc.		U S WEST Communications, Inc.
1801 California St., Room 3100		1801 California St., Room 2110
Denver, Colorado 80202		Denver, Colorado 80202
Attn: Paul Lit, Director		Attn: Pamela Jenkins

If personal delivery is selected as the method of giving notice under this section, a receipt of such delivery shall be obtained. The address to which such notices, demands, requests, elections or other communications is to be given by either party may be changed by written notice given by such party to the other party pursuant to this Agreement.

Third Party Beneficiaries

This Agreement shall not provide any person not a party to this Agreement with any remedy, claim, liability, reimbursement, claim of action or other right in excess of those existing without reference to this Agreement.
Governing Law

This Agreement shall be governed by the substantive laws of the State of Colorado.
Lawfulness Of Agreement

This Agreement and the parties' actions under this Agreement shall comply with all applicable federal, state, and local laws, rules, regulations, court orders, and governmental agency orders. If a court or governmental agency with proper jurisdiction determines that this Agreement, or a provision of this Agreement, is unlawful, this Agreement, or that provision of this Agreement, shall terminate. If a provision of this Agreement is so terminated but the parties legally, commercially, and practicably can continue this Agreement without the terminated provision, the remainder of this Agreement shall continue in effect.
Confidential Status

The parties acknowledge that this Agreement contains commercially confidential information which may be considered proprietary by either or both parties, and agree to limit distributions of the Agreement to those individuals in their respective organizations with a need to know the contents of the Agreement. The parties further agree to seek commercial confidential status for the Agreement with any regulatory commission with which the Agreement must be filed, to the extent such a designation can be secured.
Entire Agreement

This Agreement and any Exhibits, Attachments or Schedules attached hereto, constitute the entire understanding between the parties and supersede all prior understandings, oral or written representation, statements, negotiations, proposals and undertakings with respect to the subject matter hereof.
Headings

The headings in this Agreement are for convenience and shall not be construed to define or limit any of the terms herein or affect the meaning or interpretation of this Agreement.

IN WITNESS WHEREOF, the parties have entered into this Agreement as of the date first written above.

U S WEST LONG DISTANCE, INC.		U S WEST COMMUNICATIONS, INC.
__________ Signature		__________ Signature
__________		C. E. Osborn
Printed Name		Printed Name
__________		V.P - Diversified Carrier Markets
__________ Title		__________ Title
__________ Date		__________ Date
		MALHEUR HOME TELEPHONE COMPANY
		__________ Signature
		C. E. Osborn
		Printed Name
		VP - Diversified Carrier Markets
		__________ Title
		__________ Date

Addendum to Agreement for Billing and Collection Services
Amendment to the Agreement for the Provision of Billing and Collection Services

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